Tunisia has a mining code that is a pleasure to read - simple, concise and logical in all respects. Sadly, the French tendency of reserving - even if qualified to minor areas - certain power and discretion to definitively decide a matter results in a serious impact on its score. It would take no more than 100 word changes to move Tunisia to the top quartile of our ratings.

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Tunisia, one of the wealthiest countries in Africa, is currently undergoing economic reform and liberalization. The country’s economic growth has historically depended on oil, phosphates, agri-food products, car parts manufacturing, and tourism. Tunisia’s exports include textiles and apparel, food products, petroleum products, chemicals and phosphates. The phosphates, base metals and petroleum industry provide the majority of the countries foreign earnings, with phosphates alone accounting for almost 45% of the country’s export earnings. The minerals industry contributes roughly 3% to Tunisia’s GDP.

The January 2011 overthrow of President Zine el Abidine Ben Ali had a severe impact on investment and tourism, damaging Tunisia’s economy. The Tunisian government’s current challenges include controlling the budget and current account deficits, strengthening the financial system, addressing the high unemployment rate and the economic disparity between the coastal region and the less developed interior, as well as providing reassurance to investors.

PRINCIPAL LEGISLATION AND REGULATOR

The principal minerals legislation in Tunisia is the Mining Code (Loi no. 2003-20 de 28 avril 2003 portant promulgation du code minier), which replaced the earlier 1953 Mining Code in an effort to promote investment. Article 7 of the Mining Code provides that mineral substances in the soil and subsoil of the territory of Tunisia and its oceans are the property of the state. Mineral rights cannot be pledged, but extracted minerals and the shares of mining companies are movable rights. Prospecting, exploration and mining operations are subject to mining titles issued by the Minister responsible for Mines.

Any natural person or legal entity fulfilling the necessary conditions can obtain a mining title. When considering an application for an Exploration Permit, the technical and financial capacity of the applicant and the nature of proposed work will be taken into consideration. In the event of competing applications for the same area, such applications are classified according to the abovementioned criteria.

The Mining Code created a Mining Consultative Committee (Comité Consultatif des Mines) whose opinion is obligatory in cases specified by the Code, though the Minister responsible for Mines can consult the committee for any other mining-related issue. Mines are regulated by the National Office of Mines, which conducts geological research, prepares geologic and geophysical maps, and promotes private mining operations. The Mining Code sets a tax rate of 25% on mining activity profits, but in includes a five-year tax holiday at the beginning of exploitation.

Exploration Permits and Exploitation Concessions are granted for all substances within a particular group. Different persons may hold Exploration Permits and Exploitation Concessions in the same perimeter for different groups of minerals. In the event that two Exploitation Concessions for mineral substances of different groups overlap, if there is no agreement between the two titleholders, the Minister in charge of Mines determines the manner in which the mining works will be completed to minimize prejudice to each titleholder.

GRANT AND FORMS OF MINERAL TITLE

The Mining Code provides for the following types of mining titles:

Prospecting Licence (l’autorisation de prospection): This authorization is accorded by order of the Minister in charge of Mines to allow prospecting activities for one or more mineral substances to enable the preparation of applications for Exploration Permits. The authorization is valid for a maximum period of one year, renewable once for an additional year, and cannot be transferred. Prospecting authorizations for the same zone can be issued to multiple petitioners. The territory covered by the authorization may include the perimeter of another mining title unless the Exploration Permit or Mining Concession is for the same group of minerals. The rights of a mining titleholder prevail over those of the prospecting authorization holder, and the prospecting authorization holder cannot impede the mining titleholder’s activities. This authorization is not a prerequisite for an Exploration Permit.

Exploration Permit (permis de recherche): This permit grants the holder the exclusive right to undertake exploration activities and the exclusive right to obtain a Mining Concession during the duration of the Exploration Permit. The petitioner must have an actual or designated domicile in Tunisia, or designate a representative domiciled in Tunisia. The mineral substance groups and the requested surface listed in the written application cannot be modified. Applications for Exploration Permits must specify the nature of the exploration work, the minimum expenditures necessary to conduct the work, and a description of the management and those responsible for supervision. The review of an Exploration Permit will include the technical and financial capacity of the applicant as well as the nature of the proposed work. Concurrent applications for the same area are classified according to the abovementioned criteria. The permit is granted subject to any rights legitimately acquired by third parties. The Permit is granted by order of the Minister responsible for Mines with the accord of the Mining Consultative Committee for an initial period of three years, renewable for two successive periods of a maximum of three years each, provided that the holder has fulfilled its obligations, presents a request prior to the expiration of the permit, commits to a minimum work and financial plan, provides proof of sufficient technical and financial capacity, and has not committed any infractions or grave environmental harm. An exceptional renewal is possible after the second renewal in the event of a discovery of an exploitable deposit. The titleholder must begin works within one year. The renewal can include all or part of the original perimeter at the request of the titleholder. Exploration permits are considered real estate, and are indivisible and transferable after death (upon notification of the Minister in charge of Mines). The title can only be transferred or leased in whole or in part to enterprises that satisfy the conditions for the granting of an Exploration Permit and transfers or leases must have prior authorization from the Minister responsible for Mines with the approval of the Mining Consultative Committee. Authorization for transfer or lease is of right provided that the petitioner has completed the minimum work fixed in the order granting the permit (authorization is deemed granted if the Minister does not issue a decision within two months). The Permit may be cancelled for failure to fulfil the obligations under the permit and other refusals to conform to required terms and conditions. In the event of a discovery of a substance outside the group for which the concession was granted, the titleholder can apply for an Exploration Permit or Mining Concession to cover the group of minerals. This will be accorded ex officio. If another titleholder claims this substance under a prior Mining Concession, the later Mining Concession holder can obtain the substance upon payment of just compensation.

Exploitation Concession (concessions d’exploitation): This title is granted by the Minister in charge of Mines upon the approval of the Mining Consultative Committee for a period consistent with the existing reserves (and can be extended as necessary) and confers the exclusive right to conduct mining operations and to dispose of the extracted minerals. The granting of an Exploitation Concession cannot prejudice the rights of other titleholders on the same land and dealing in whole or in part on the same area and the same group of substances minerals. Work must commence within two years or the title may be cancelled. This title cannot exceed the perimeter covered by the Exploration Permit upon which it is based, and can only include the substances covered by the Exploration Permit. The Exploitation Concession is granted under the following conditions: demonstrated existence of an economically viable deposit on the perimeter; acceptance of the general terms and conditions of contract (cahier des charges) relative to production, amount of Exploration work, and quantities of equipment for which the titleholder will be held accountable (the cahier des charges will be approved by decree and will establish the dispute resolution mechanism and stipulate the rights and obligations of the titleholder); demonstrated technical and financial capacity; a development plan. The Exploitation Concession is considered real estate and is indivisible. The transfer or lease, in whole or in part, must be subject to authorization by the Minister in charge of Mines, with the agreement of the Mining Consultative Committee. This authorization can be refused for the same reasons for which an Exploitation Concession application can be refused. The Exploitation Concession can be cancelled if the titleholder: no longer has the technical and financial capacity to meets its obligations; has not paid the proportional fees; refuses to accept the obligations of a partner who withdraws; refuses to provide the necessary documents; or refuses to conform to the measures prescribed by the Minister in charge of Mines in the Mining Code. In the event of cancellation, the granting authority reserves the right to exploit the mine directly or indirectly. If the titleholder, without legitimate reason, does not conform to the obligations under the Code, the titleholder may be put on notice to comply with its obligations within six months.

DEVELOPMENT CONSIDERATIONS

The Mining Code requires that Exploration Permit and Exploitation Concession holders conform to the existing requirements regarding health and safety, environmental protection, and water and forestry. In the absence of other requirements, the titleholder must: complete an environmental impact study; enact measures to protect the environment and respect the commitments made in the EIS; obtain an insurance policy for the risk of harmful impact to their surroundings or third parties; enact measures necessary to protect human life and the environment in cases of extraordinary circumstances due to the titleholder’s behaviour or natural phenomenon; and take necessary measures to protect works from professional risks. The Land Management and Urbanism Code (Code de l’Aménagement du Territoire et de l’urbanisme promulgated by Loi no. 94-122 du 28 novembre 1994, as amended by Loi no. 2003-78 du 29 décembre 2003, Loi no. 2005-71 du 4 août 2005, Loi no. 2009-29 du 9 juin 2009 modifiant et complétant le code de l’aménagement du territoire et de l’urbanisme) and its implementing regulations provide the requirements for the environmental impact study (EIS).

The Mining Code requires a development plan as part of the application for the Exploitation Permit. The development plan must include the following elements: geological study and estimate of the reserves; mining plan; mineral treatment plan; feasibility study; a study on the personnel/human resources requirements and a plan for the recruitment and training of local personnel; schedule for the development; environmental impact study corresponding to the applicable legislation. The Mining Code also requires that the titleholder produce an abandonment plan and a site rehabilitation plan and requires rehabilitation of the site so as to avoid prejudice to the health and security of third parties, the environment, and the natural resources. The titleholder remains liable for five years for all damages caused by its exploitation of the mine.

Titleholders must, to the extent possible, prioritize the hiring of Tunisian personnel and assure the training of Tunisian personnel in all specialties required for the mining work in conformity with a plan agreed with the competent services of the Ministry responsible for professional training. The titleholders are also obligated to prioritize the use of materials or products made in Tunisia, as well as services and subcontractors of Tunisian nationality, provided the price, quality, and delivery schedules are equivalent to international offers.

No mining title gives the right to occupy the surface land for prospecting, exploration or exploitation without the written consent of the land titleholder. Nevertheless, in the absence of an amicable agreement, the titleholder can obtain authorization by order of the Minister in charge of Mines to occupy the land necessary to conduct its activities. This notification is transmitted to the land titleholder by the mining titleholder and is effective immediately. The landowner has a right to compensation, paid in advance, which (in the absence of an amicable agreement) is fixed at an annual price of twice the rental value at the time of occupation. The mining titleholder must also provide compensation for any damages caused by its activities. Occupation of enclosed land always requires the owner’s consent. If any occupation of land prevents the landowner from using the land for a period of more than three years, the titleholder may have to acquire the land according to the relevant regulations, with a price set at twice the value of the land at the time of occupation. Disputes regarding the payment are within the jurisdiction of tribunals, who issue orders that are enforceable, regardless of whether there is an appeal. The surface rights titleholder can claim, in exchange for fair compensation, any substances which are not used by the operator and not classed as mines.

Mining titleholders can only occupy public or private land belonging to the state or local authorities with prior authorization, and must provide compensation for any damage caused to public or private property. The state reserves the right to use any paths or trails established by the titleholder for providing public services. If public works cause damage or modifications to mining facilities or impede the mining activities, the titleholder is entitled to compensation for the value of the prejudice caused, as determined by a competent tribunal in the absence of an agreement.

Tunisia is located on the coast of the Mediterranean Sea in North Africa, between Algeria and Libya. The climate is temperate in the northern mountains and central plain, with mild, rainy winters and hot, dry summers, while the semiarid south merges into the Sahara desert, which comprises 30% of the territory. The country’s natural resources include petroleum, phosphates, iron ore, lead, zinc and salt. Malta and Tunisia are considering the commercial exploitation of the continental shelf between the two countries, with a focus on oil exploration.

The principal environmental legislation in Tunisia is the Land Management and Urbanism Code (Code de l’Aménagement du Territoire et de l’urbanisme promulgated by Loi no. 94-122 du 28 novembre 1994, as amended by Loi no. 2003-78 du 29 décembre 2003, Loi no. 2005-71 du 4 août 2005, and Loi no. 2009-29 du 9 juin 2009 modifiant et complétant le code de l’aménagement du territoire et de l’urbanisme), and its implementing regulations. The preamble of the Constitution (2014) notes the importance of maintaining a healthy environment and climate in order to guarantee the sustainability of the country’s natural resources. Article 12 notes the state’s role in promoting sustainable development and the rational exploitation of natural resources, while Article 13 stipulates that the natural resources are the property of the Tunisian people, and the state exercises sovereignty over these resources as the representatives of the people. Articles 135–37 address the rights of local authorities regarding control over resources transferred to them by the central government.

The Mining Code requires that Exploration Permit and Mining Concession holders conform to existing requirements regarding health and safety, environmental protection, and water and forestry. In the absence of other requirements, the titleholder must: complete an environmental impact study (EIS); enact measures to protect the environment and respect the commitments made in the EIS; obtain an insurance policy in respect to risks of harmful impacts to their surroundings or third parties; and enact measures necessary to protect human life and the environment in cases of extraordinary circumstances due to the titleholder’s behaviour or natural phenomenon. The Mining Code also requires that the titleholder produce an abandonment plan and a site rehabilitation plan and to rehabilitate the site so as to avoid prejudice to the health and security of third parties, the environment and the natural resources. The titleholder remains liable for five years for all damages caused by its exploitation of the mine.

Mining titleholders are subject to the relevant legislation regarding conservation and utilisation of water discovered through their mining activity with the following exceptions: extraction and use of mine water is not subject to the Water Code (Loi no. 75-16 du 31 mars 1975, as amended by Loi. No. 87-35 du 6 Juillet 1987 and Loi. No. 2001-116 du 26 novembre 2001 portant simplification des procédures administratives relatives aux autorisations délivrées par le ministère de l’environnement et de l’aménagement du territoire dans les domaines de sa compétence)), but must take place upon notification of the Minister in charge of Water, who can impose certain conservation measures, though authorization cannot be refused unless the titleholder refuses to comply with the conservation measures for groundwater aquifers; authorization to use the water can only be refused if it will cause irreparable prejudice to existing or proposed water use.

The government bodies responsible for environmental issues are the Ministry of Environment, Land Management, and Sustainable Development, and the National Environmental Protection Agency (ANPE, in French).

The EIS assesses, evaluates and measures the direct and indirect short-, medium-, and long-term environmental effects of the project, and must be submitted for review and approved by the ANPE prior to obtaining any administrative authorizations for the project. Decree 2005-1991 includes Annexes that list the types of projects subject to an environmental impact study (EIS) requirement. Projects in Annex 1 are required to submit an EIS prepared by consultants or specialized experts, while projects in Annex 2 are subject to terms and conditions specified in a contract (cahier des charges) approved by order of the Minister responsible for the Environment that determines the environmental obligations of the titleholder (see Arrêté du ministre de l’environnement et du développement durable, du 8 mars 2006, portant approbation des cahiers des charges relatifs aux procédures environnementales que le maître de l’ouvrage ou le pétitionnaire doit respecter pour les catégories d’unités soumises aux cahiers des charges for approved samples).

Decree 2005-1991 specifies the contents of the EIS, which include: a detailed description of the project; initial analysis of the site and the environment; analysis of the foreseeable direct and indirect consequences; the environmental protection measures proposed by the petitioner; a detailed environmental management plan. The EIS costs are borne by the petitioner. The EIS (or the signed and authenticated cahier des charges for Annex 2 projects) is submitted to the ANPE and to each of the relevant ministers. The ANPE has 21 days to issue a decision on the EIS for projects Annex 1 Category A projects, and three months for Category B projects. The EIS is deemed approved if the ANPE does not issue a decision by the expiration of the relevant period. The 21-day period is extended to three months for Category A projects that might impact protected zones, national parks, urban parks, and certain flora and fauna.

The relevant authorities can authorize a development project subject to an EIS only after ascertaining that the ANPE does not object to the implementation of the project or after receiving the signed and authenticated cahier des charges in accordance with the model approved by the Minister responsible for the Environment. The Minister responsible for the Environment and Land Management can propose any action or modification of the project based on the EIS in order to avoid or limit the environmental impact of the project. All modifications are made with the agreement of the Minister in charge of the Environment and Land Management and the Minister responsible for Mines. In the event that the measures mentioned in the EIS or in the signed and authorized contract are not respected, the authorization can be withdrawn.